Individuals and organizations engage in marketing to facilitate exchanges, the provision or transfer of goods, services, or ideas in return for something of value. Any product (good, service, or even idea) may be involved in a marketing exchange. We assume only that individuals and organizations expect to gain a reward in excess of the costs incurred. For an exchange to take place, four conditions must exist. First, two or more individuals, groups, or organizations must participate, and each must possess something
of value that the other party desires. Second, the exchange should provide a benefit or satisfaction to both parties involved in the transaction. Third, each party must have confidence in the promise of the “something of value” held by the other. If you go to a Nora Jones concert, for example, you go with the expectation of a great performance. Finally, to build trust, the parties to the exchange must meet expectations.
Figure 1.2 depicts the exchange process. The arrows indicate that the parties communicate that each has something of value available to exchange. An exchange will not necessarily take place just because these conditions exist; marketing activities can occur even without an actual transaction or sale. You may see an ad for a Sub-Zero refrigerator, for instance, but you might never buy the product. When an exchange occurs, products are traded for other products or for financial resources.
Marketing activities should attempt to create and maintain satisfying exchange relationships. To maintain an exchange relationship, buyers must be satisfied with the good, service, or idea obtained, and sellers must be satisfied with the financial reward or something else of value received. A dissatisfied customer who lacks trust in the relationship often searches for alternative organizations or products.
Marketers are concerned with building and maintaining relationships not only with customers but also with relevant stakeholders. Stakeholders include those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes; these include customers, employees, investors and shareholders, suppliers, governments, communities, and many others. Developing and maintaining favorable relations with stakeholders is crucial to the long-term growth of an organization and its products
Marketing Occurs in a Dynamic Environment
Marketing activities do not take place in a vacuum. The marketing environment, which includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customer and affects the marketing mix (see Figure 1.1). The effects of these forces on buyers and sellers can be dramatic and difficult to predict. They can create threats to marketers but also can generate opportunities for new products and new methods of reaching customers.
The forces of the marketing environment affect a marketer’s ability to facilitate exchanges in three general ways. First, they influence customers by affecting their lifestyles, standards of living, and preferences and needs for products. Because a marketing manager tries to develop and adjust the marketing mix to satisfy customers, effects of environmental forces on customers also have an indirect impact on marketing-mix components. For example, rising gasoline prices and declining sales of gas-guzzling models have led many automakers, including General Motors, Ford, and DaimlerChrysler, to make improving vehicle fuel economy the highest priority. Likewise, Hertz introduced a new service called “Green Collection” that allows customers to reserve more fuel-efficient vehicles for rent.12 Second, marketing environment forces help to determine whether and how a marketing manager can perform certain marketing activities. Third, environmental forces may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix
Figure 1.2 depicts the exchange process. The arrows indicate that the parties communicate that each has something of value available to exchange. An exchange will not necessarily take place just because these conditions exist; marketing activities can occur even without an actual transaction or sale. You may see an ad for a Sub-Zero refrigerator, for instance, but you might never buy the product. When an exchange occurs, products are traded for other products or for financial resources.
Marketing activities should attempt to create and maintain satisfying exchange relationships. To maintain an exchange relationship, buyers must be satisfied with the good, service, or idea obtained, and sellers must be satisfied with the financial reward or something else of value received. A dissatisfied customer who lacks trust in the relationship often searches for alternative organizations or products.
Marketers are concerned with building and maintaining relationships not only with customers but also with relevant stakeholders. Stakeholders include those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes; these include customers, employees, investors and shareholders, suppliers, governments, communities, and many others. Developing and maintaining favorable relations with stakeholders is crucial to the long-term growth of an organization and its products
Marketing Occurs in a Dynamic Environment
Marketing activities do not take place in a vacuum. The marketing environment, which includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customer and affects the marketing mix (see Figure 1.1). The effects of these forces on buyers and sellers can be dramatic and difficult to predict. They can create threats to marketers but also can generate opportunities for new products and new methods of reaching customers.
The forces of the marketing environment affect a marketer’s ability to facilitate exchanges in three general ways. First, they influence customers by affecting their lifestyles, standards of living, and preferences and needs for products. Because a marketing manager tries to develop and adjust the marketing mix to satisfy customers, effects of environmental forces on customers also have an indirect impact on marketing-mix components. For example, rising gasoline prices and declining sales of gas-guzzling models have led many automakers, including General Motors, Ford, and DaimlerChrysler, to make improving vehicle fuel economy the highest priority. Likewise, Hertz introduced a new service called “Green Collection” that allows customers to reserve more fuel-efficient vehicles for rent.12 Second, marketing environment forces help to determine whether and how a marketing manager can perform certain marketing activities. Third, environmental forces may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix
Marketing environment forces can fluctuate quickly and dramatically, which is one reason marketing is so interesting and challenging. Because these forces areclosely interrelated, changes in one may cause changes in others. For example, evidence linking children’s consumption of soft-drinks and fast foods to health issues such as obesity, diabetes, and osteoporosis has exposed marketers of such products to negative publicity and generated calls for legislation regulating the sale of soft-drinks in public schools. Some companies have responded to these concerns by voluntarily reformulating products to make them healthier or even introducing new products. PepsiCo, for example, introduced Tropicana FruitWise bars and Life cereal with yogurt and began a promotional campaign to help consumers identify healthier eating choices. The company placed a green “Smart Spot” on more than 200 products that meet nutrition criteria on limits on fat, cholesterol, sodium, and added sugar, such as Baked Lay’s potato chips and Tropicana orange juice.13 Although changes in the marketing environment produce uncertainty for marketers and at times hurt marketing efforts, they also create opportunities. Marketers who are alert to changes in environmental forces not only can adjust to and influence these changes but also can capitalize on the opportunities such changes provide.
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